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Journey of the iPhone

Commodity Chain of the iPhone
by

Rachel Fatica

on 30 July 2013

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Transcript of Journey of the iPhone

Journey of the iPhone
Commodity Chain
Marketing
Finance
Raw Materials
Manufacturers
Distributors
Consumers
Corporations
The corporate sectors involved in creating the iPhone include:

Hardware Engineering
Software Engineering
Marketing
Design
Merchandising
Product Management
Customer Service & Report
Finance
Human Resources
Information Systems & Technology
Legal
Operations
Real Estate & Development
Sales
Administrative

(http://www.apple.com/jobs/us/corporate.html)
Most of the people working in the Apple corporation work in one of Apple’s major corporate offices. The main office is located in the Silicon Valley where there are other major technology corporation offices. Other office locations are in the major cities of the United States but the jobs are much more scarce.


The Heart of Technological Corporations
They even have their own campus!
Although, Apple at first denied of conducting research to make their products they later admitted into conducting monthly surveys to iPhone users. The surveys are taken by people all over the world.
(http://www.networkworld.com/community/blog/how-apple-conducts-market-research-and-keeps-ios-source-code-locked-down)
Platinum, aluminum, copper, silver, and gold are some of the raw materials involved in the making of the iPhone. It is difficult to determine where all the raw materials were extracted because of the great number of parts needed to build this device.

Although the places about to mentioned are where the raw materials of the iPhone 5s are extracted, the previous models may be similar.


Raw Materials
Gold
Yanachocha Rock, Peru
(http://www.infomine.com/minesite/minesite.asp?site=yanacocha)
Copper
Escondida Rock, Chile
(http://www.infomine.com/minesite/minesite.asp?site=escondida)
Silver
Cannington Rock, Australia

(http://www.infomine.com/minesite/minesite.asp?site=escondida)
Platinum
South African Bushveld Complex or Impala
(http://www.infomine.com/minesite/minesite.asp?site=impala)
Some of these materials can be and are recycled.

Rare Earth materials are mostly (90%) extracted from China.
Suppliers
Apple has over 200 suppliers for their products including major companies such as Samsung.

iPhone 4 materials
i. Basic Materials: Glass, 40.9 g; Stainless Steel, 38.7g; Battery, 24.7g; Circuit Boards, 15.4g; Display, 7.2g; Other, 5g; Plastic, 3.1g

(http://www.apple.com/environment/reports/docs/iPhone_4_Product_Environmental_Report.pdf)

These are some of the known suppliers and costs for iPhone 4...
1. Samsung Electronics (Seoul, Korea)
- A4 Processor ($10.75)
- DRAM Memory ($13.80)
- Flash ($27.00)
2. Large Precision, Genius Electronic
- Camera Lens Modules
3. Omnivision (Santa Clara, CA)
- Camera Primary and Secondary ($10.75)
4. Broadcom Corporation (Irvine, CA)
- GPS, Wifi, Bluetooth ($9.55)
5. LG (Seoul, Korea)
- Display ($28.50)
6. TPK/Balda (Taipei, Taiwan)
- Touchscreens ($10.00)
7. Wintek (Taichung)
- Touchscreens ($10.00)
8. Chimei Innolux (Miaoli)
- Touchscreens ($10.00)
9. AKM Semi Conductor (San Jose, CA)
- E-Compass ($0.70)


10. Cirrus’s Logic (Austin, TX)
- Audio Codec ($1.15)
11. StMicroelectronics (Geneva, Switzerland)
- Gyroscope, Accelerometer ($3.25)
12. Texas Instruments Inc. (Dallas, TX)
- Touchscreen Controller ($1.23)
13. Dialog Semiconductor (Nabern, Germany)
- Main Power Management Device($2.03)
14. Infineon Technologies AG (Neubiberg, Germany)
- Base Band ($11.72)
- Transceiver ($2.33)
15. Intel (Portland, OR)
- Memory ($2.70)
16. Skyworks (Woburn, MA)
- Various Radio Frequency Modules ($8.25)
17. Murata (Kyoto, Japan)
- Various Radio Frequency Modules ($8.25)
18. TriQuint
- Various Radio Frequency Modules ($8.25)
(http://public.tableausoftware.com/views/iPhone4GlobalSupplyChain/Dashboard1?:embed=y&:loadOrderID=0&:display_count=no)

(http://www.isuppli.com/Teardowns/News/Pages/iPhone-4-Carries-Bill-of-Materials-of-187-51-According-to-iSuppli.aspx)
Final Assembly
The final assembly of the iPhone mostly takes place within the Hon Hai Precision Industry (better known as Foxconn). Here, there were cases where in order for some students to receive education they must work there. Forced to work there, they faced overtime, little pay and had very little room for mistakes.
Three current locations of the assembly...
Jundiaí, São Paulo, Brazil
Shenzhen, Guangdong, China
Taiyuan, Shanxi, China
Pegatron Corporation
Located in Shanghai, China, Apple is slowly changing their supplier form Hon Hai to Pegatron because of the poor treatment of the workers at the former corportion.

http://www.foxbusiness.com/technology/2013/01/25/apple-lifts-veil-on-far-flung-supply-chain-exposes-flaws/

http://www.nytimes.com/2012/09/11/technology/foxconn-said-to-use-forced-student-labor-to-make-iphones.html?pagewanted=all&_r=0


COST TO BUILD

Total cost to build an iPhone 4 is $187.51.
(http://www.isuppli.com/Teardowns/News/Pages/iPhone-4-Carries-Bill-of-Materials-of-187-51-According-to-iSuppli.aspx)

Newer models and those with more capacity cost more to build, over $200, and thus have higher price tags.

Consumer Finance

They offer different finance plans in order to make it affordable for almost everyone. Because Apple often has high price tags, they have to bait their customers by advertising the various ways of purchasing their products.

(http://www.apple.com/financing/consumer.html)
Apple Retail Store

One of the main distributors of the iPhone is the Apple Retail Store itself. Here, the potential buyers can "test drive" the electronics. It makes it easy for even those who were not thinking about buying one to feel like they need or or want one of the devices.

The store has a clean look to it: white walls, large and simple tables with products neatly organized by types, and a sea of specialists in blue t-shirts. The customers do not even have to go to the registers to purchase a product. They simply find one of the workers who will use their iPhones to swipe your credit card and make the transaction and it is done.

There are 400 Apple Retail Stores world-wide.
(http://www.ifoapplestore.com/stores/store_number_list.html)


Google Maps provided by (http://www.ifoapplestore.com/current-stores-map/)
© copyright 2013 ifoAppleStore.com
Map of Current Apple Retail Store Locations
Other Ways of Purchasing an iPhone
Online
Consumers have the option to purchase products via online, right from their own homes. This can be through the Apple Store website or other resellers such as Amazon. With the online option, they can even add personalized engravings for free.

Resellers
-Cellular companies (Verizon, T-Mobile)
-Electronics store (Best Buy)

Consumers
Once purchasing their iPhones via online or at one of the retailers, they use the commodity for calling, texting, browsing the web, reading books, playing games, and even using the iPhone to run their own business. The possibilities seem endless with the ownership of an iPhone.

The consumers are typically at the end of the iPhone commodity chain unless the recycling aspect is involved, which in some cases is true.
Recycling
Apple offers a recycling program so that the customers can bring their old devices to be reused or recycled. If applicable, Apple will offer an Apple Gift Card which is equal to the monetary value of the old device.
http://www.apple.com/recycling/
Sales prices
The prices of an iPhone with the purchase of a contract varies depending on the model and memory storage of the iPhone.

iPhone 4 - From $0
iPhone 4s - From $99
iPhone 5 - From $199 (16GB), from $299 (32GB), and from $399 (64GB)

Customers also have the option get an unlocked and a contract-free iPhone for a much higher price tag (3 to 4 times more)
(http://store.apple.com/us/buy/home/shop_iphone/family/iphone4?product=IPHONE4)

(http://store.apple.com/us/buy/home/shop_iphone/family/iphone4s?product=IPHONE4S)

(http://store.apple.com/us/buy/home/shop_iphone/family/iphone5?product=IPHONE5)
Corporations
Marketing
Raw Materials
Manufacturers
Finance
Distributors
Consumers
Recycling
Commodity Chain of iPhone
Strong bonding
Strong bonding
Thank you for watching!
Prezi created by Rachel Fatica

GEOG 2750 - Ohio State University
Summer 2013
http://www.valuewalk.com/2013/04/raw-materials-used-in-iphone-infographics/
Works Cited
Social and Environmental Effects

-(Social) Many job opportunities offered through different sectors.
-(Environmental) Makes an area more urbanized.
Social and Environmental Effects

-(Social) Connects the marketing to the consumers.
-(Environmental) Not much environmental effect
Social and Environmental Effects

-(Social) Connects different countries and involves globalization.
-(Environmental) Materials are extracted from the environment and therefore depleting natural resources.
Social and Environmental Effects

-(Social) Offers employment and forces globalization.
-(Environmental) Factories can cause major air pollution, hurting the environment and the health of the human population.
Social and Environmental Effects

-(Social) Works with the consumers and the marketing sector.
-(Environmental) Not much effect on the environment.
Social and Environmental Effects

-(Social) The iPhone is sold world-wide which globally unifies people with the same technology.
-(Environmental) The use of transportation causes for there to be air pollution and thus contributing to global warming.
Social and Environmental Effects

-(Social) People can use the iPhone for different purposes: socializing, education, and running their own business.
-(Environmental) Their demand for technology causes this whole chain and thus has a big influence in how it can affect the environment.
Social and Environmental Effects

-(Social) Makes people more aware of the importance of proper disposal of technology.
-(Environmental) Helps conserve resources and materials used in iPhone.
Works Cited

Articles

Barboza, D., & Duhigg, C. (2012, September 10). China Contractor Again Faces Labor Issues on iPhones.
Retrieved July 21, 2013, from The New York Times:
http://www.nytimes.com/2012/09/11/technology/foxconn-said-to-use-forced-student-
labor-to-make-iphones.html?pagewanted=all&_r=0

Heisler, Y. (2012, August 12). iOnApple. Retrieved July 21, 2013, from NetworkWorld:
http://www.networkworld.com/community/blog/how-apple-conducts-market-research-
and-keeps-ios-source-code-locked-down

Keller, K. (2010, June 28). iPhone 4 Carries Bill of Materials of $187.51, According to iSuppli. Retrieved
July 21, 2013, from iSuppli: http://www.isuppli.com/Teardowns/News/Pages/iPhone-4-
Carries-Bill-of-Materials-of-187-51-According-to-iSuppli.aspx

Samson, A. (2013, January 25). Apple Lifts Veil on Far-Flung Supply Chain, Exposes Flaws. Retrieved
July 21, 2013, from Fox Business:
http://www.foxbusiness.com/technology/2013/01/25/apple-lifts-veil-on-far-flung-supply-
chain-exposes-flaws/

Tariq, U. (2013, April 25). Raw Materials Used in iPhone. Retrieved July 21, 2013, from ValueWalk:
http://www.valuewalk.com/2013/04/raw-materials-used-in-iphone-infographics/



Helpful websites

http://www.apple.com/jobs/us/corporate.html

http://www.apple.com/environment/reports/docs/iPhone_4_Product_Envi ronmental_Report.pdf

http://store.apple.com/us/buy/home/shop_iphone/family/iphone4?product=IPHONE4

http://store.apple.com/us/buy/home/shop_iphone/family/iphone4s?product=IPHONE4S

http://store.apple.com/us/buy/home/shop_iphone/family/iphone5?product=IPHONE5

http://www.apple.com/financing/consumer.html

http://www.apple.com/recycling/


http://www.infomine.com/minesite/minesite.asp?site=yanacocha

http://www.infomine.com/minesite/minesite.asp?site=escondida

http://www.infomine.com/minesite/minesite.asp?site=escondida

http://www.infomine.com/minesite/minesite.asp?site=impala

http://public.tableausoftware.com/views/iPhone4GlobalSupplyChain/Dashboard1?:embed=y&:loadOrderID=0&:display_count=no)

http://www.ifoapplestore.com/stores/store_number_list.html)

Google Maps provided by http://www.ifoapplestore.com/current-stores-map/
© copyright 2013 ifoAppleStore.com



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